One-Year Transition Period Necessary to Implement Medicaid Reimbursement, Senators Tell HHS

Published Online: Wednesday, May 21, 2014
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May 21, 2014, Arlington, Va. – Citing the need for a one-year transition period for states to implement the July 2014 average manufacturer price (AMP)-based federal upper limits (FULs), nine U.S. Senators are urging U.S. Department of Health & Human Services Secretary Kathleen Sebelius to consider the challenges that states will face when the final Medicaid AMP-based FULs are published.

In July 2014, CMS will publish the final Medicaid AMP-based FULs. The agency has indicated that it expects the new FULs to be effective immediately.

“We believe that such a rapid implementation will pose problems for under-reimbursement of Medicaid prescriptions at the state level, which may pose problems for beneficiaries,” the Senators wrote to the Administrator. “We encourage CMS to establish a one-year transition period for state implementation of the FULs as well as for implementing any necessary dispensing fee changes by the states once the new FULs have been published along with any corresponding and necessary regulatory guidance.”

“Most states face numerous obstacles to immediate implementation, including current year legislative sessions that do not allow for Medicaid reimbursement changes, the need for legislative or regulatory changes to achieve compliance, the need for cost-of-dispensing-fee studies for calculating fair pharmacy reimbursement, and/or the need to file a State Plan Amendment to implement the new reimbursement approach,” the Senators stated in the letter.

The letter also cites the support for a one-year transition period by the National Association of Medicaid Directors (NAMD). In a letter to CMS in September 2013, NAMD also recognized the above-mentioned obstacles for states, and requested from CMS the creation of a transition period up to one year for implementation.

NACDS President and CEO Steven C. Anderson, IOM, CAE expressed appreciation to the Senators for sending this letter, “The bottom line is that patient access to pharmacy care should not be compromised. Implementation of these AMP-based FULs poses great concern for pharmacy patient care, and we appreciate the leadership of Senators Mark Warner (D-VA) Johnny Isakson (R-GA), and the support of their colleagues in recognizing how this immediate reimbursement change could impact access to pharmacy services for low-income Americans.”
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